The European Investment Bank (EIB) has agreed to provide credit lines for a total value of EUR 220m to four Croatian banks to fund smaller-scale projects promoted mainly by small and medium-sized enterprises (SMEs), midcaps and municipalities, as well as energy efficiency initiatives.

“The partnership between the European Investment Bank and HBOR and three prominent Croatian banks will make additional long-term finance available to Croatian companies, unlock further capital for the implementation of their projects and provide significant support for youth employment”, said EIB Vice-President Dario Scannapieco. “In addition, we are using Private Finance for Energy Efficiency – an innovative financial instrument designed to foster priority investments contributing to energy efficiency – for the first time in Croatia.”

The EUR 100m loan to HBOR will co-finance midcaps’ projects in a large number of sectors, such as manufacturing, services (including tourism), infrastructure, the knowledge economy, energy, and environmental protection. Importantly, the funding aims to increase the employment of young people up to 30 years of age in Croatia, a country where the labour market is experiencing a permanently high unemployment rate of 30% among the younger generation. The EIB’s Jobs for Youth Initiative is able to give additional support to final beneficiaries if they can demonstrate that their investment project has contributed to the creation of jobs for young people.

The EIB has a well-developed partnership with HBOR and has provided this institution with credit lines amounting to approximately EUR 2.5bn (including the current transaction) since the launch of its operation in Croatia in 2001.

The EUR 60m loan to Privredna Banka Zagreb (PBZ), the second largest commercial bank in Croatia with an extensive client franchise, will be targeted at SMEs and midcaps, making affordable financing available to them.

The EUR 40m loan to Zagrebacka Banka (ZABA), the largest commercial bank in Croatia, is specifically targeted at energy efficiency measures. The loan is supported by the Private Finance for Energy Efficiency (PF4EE) financial instrument, which provides European Commission portfolio-based credit risk protection, together with long-term financing from the EIB and expert support services for financial intermediaries financed by the LIFE Programme. The PF4EE is a joint instrument of the EIB Group and the European Commission aimed at targeting the financing of energy efficiency investments in the EU and projects related to this goal. The PF4EE transaction with Zaba targets EE investments by small businesses and corporates.

Finally, the EUR 20m loan to Hrvatska Postanska Banka (HPB) is the first EIB operation with this financial intermediary, thus increasing the number of financial institutions on-lending EIB funds in Croatia.